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Can Chapter 7 Bankruptcy Discharge State Sales Taxes?
Chapter 7, colloquially known as “straight bankruptcy,” is the “operative” chapter of the Bankruptcy Code that normally governs liquidation of a debtor. Liquidation is a form of relief afforded by bankruptcy laws that involves the collection, liquidation and distribution of the nonexempt property of the debtor and culminates, if the debtor is an individual, in…
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The 2019 Global Extension to File Returns – Don’t let it Impact your Bankruptcy Discharge
Generally, in order to convert an income tax claim from priority status to a general unsecured claim eligible for discharge in bankruptcy, an individual must satisfy the three-year rule. That is, the filing of bankruptcy must occur more than three years from when the tax was due, including any extensions. If the debtor timely applied…
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Confirmation in Individuals’ Chapter 11 Case and the Automatic Stay
In Cochran v. Commissioner, 159 T.C. No. 4 (2022), the Tax Court rendered a precedential decision and ruled that the enactment of 11 U.S.C. § 1141(d)(5) created a limitation to the Tax Court’s prior holding in Moody v. Commissioner, 95 T.C. 655 (1990) with respect to the effect under 11 U.S.C. § 362(c) of a confirmation of…
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It’s Preferential To Pay Trust Fund Taxes Before Bankruptcy Because It’s Not a Preferential Transfer
Certain transfers made within 90 days of a bankruptcy filing can be set aside by the bankruptcy trustee if a creditor received an interest in a debtor’s property on account of a pre-existing debt while the debtor was insolvent, and the transfer puts the creditor in a better position than it would have been in…
